Correlation Between Healthcare Realty and HNI Corp

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Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and HNI Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Healthcare Realty and HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Realty Trust and HNI Corp, you can compare the effects of market volatilities on Healthcare Realty and HNI Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Healthcare Realty with a short position of HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and HNI Corp.

Diversification Opportunities for Healthcare Realty and HNI Corp

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Healthcare and HNI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp and Healthcare Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Healthcare Realty Trust are associated (or correlated) with HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and HNI Corp go up and down completely randomly.

Pair Corralation between Healthcare Realty and HNI Corp

Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the HNI Corp. In addition to that, Healthcare Realty is 1.24 times more volatile than HNI Corp. It trades about -0.47 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.14 per unit of volatility. If you would invest  4,105  in HNI Corp on November 27, 2023 and sell it today you would earn a total of  204.00  from holding HNI Corp or generate 4.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Healthcare Realty Trust  vs.  HNI Corp

 Performance 
       Timeline  
Healthcare Realty Trust 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Healthcare Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
HNI Corp 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in HNI Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, HNI Corp may actually be approaching a critical reversion point that can send shares even higher in March 2024.

Healthcare Realty and HNI Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthcare Realty and HNI Corp

The main advantage of trading using opposite Healthcare Realty and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, HNI Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HNI Corp will offset losses from the drop in HNI Corp's long position.
The idea behind Healthcare Realty Trust and HNI Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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